According to Trulias Price Monitor July Home Prices declined by 0.3% over the same period last year. What could be the reason for this decline are :
1) Mortgage Rates: The decline in home prices in July were mostly fueled by rising interest rates which rose to their highest level in 2 years after Federal Reserve Banks announced their plans to stop their purchase of mortgage backed securities.
2) Decline in Investor Appetite: The rise of home prices in the previous quarters have made the market too high for any profit taking. We saw 3 investors back out of San Jose Short Sale listing in July since they were finding much cheaper properties to flip. Asking prices were only up 3.3% compared to previous quarters which has seen 4.2% increase in April.
3) More Listings: The record rise in prices has encouraged some home owners who were unsure about selling their homes to list them. With more inventory, there are less multiple offers on properties as they were in the previous months.
We see signs of slow down in our immediate market in Los Gatos with some over-priced homes such as 16600 Englewood Ave, Los Gatos staying on the market more than 60 days where a home on the same street sold in 6 days!
Are you still looking to buy a home in San Jose!? Has the rise in interest rates cooled off your plans!?